New Energy Study Downplays Efficiency Gains

Absent a prolonged drop in Americans’ living standards, America will still need significant new supplies of energy to fuel its growing economy regardless of conservation efforts, says a new study by the Citizens for a Sound Economy Foundation (CSE), a grassroots advocacy and education organization dedicated to economic freedom.

“Abundant Energy: The Building Block of Prosperity” rebuts the claim that America can avoid developing new sources of energy and modernizing its energy transmission infrastructure simply by relying on improved efficiency and conservation. In the entire post-war period from 1949, the CSE study observed that the U.S. economy reduced its energy intensity substantially — cutting the amount of BTUs consumed per dollar of GDP virtually in half. But during the same period, demand for energy tripled nevertheless, largely because of strong economic growth. “Without the tripling of energy supplies, the strong economic growth that has made the U.S. the most powerful economy in history would not have been possible,” conclude CSE analysts.

Alliance spokesman Bruce Josten, Executive Vice President for Government Affairs at the U.S. Chamber of Commerce, said the study confirms an important point often missing in the energy debate. He noted that history and technological advances have shown that the U.S. can increase conservation and still grow its economy. But, he said, “We can’t meet our energy demand through conservation alone, unless we halt economic progress, and I think most Americans would reject that approach.”

CSE also finds that “energy efficiency” is often misunderstood when used interchangeably with conservation. “Using less energy is efficient only if the cost of the resources needed to replace energy use is lower than the cost of the energy that is ‘saved’,” observes the study. For example, a household appliance may seem more efficient by using less energy, but may actually require a net increase in energy to produce, and is therefore less efficient than the product replaced.

The Alliance for Energy and Economic Growth represents more than 550 energy users, ranging from small, independent businesses to the nation’s largest manufacturers, as well as companies that generate and distribute energy from a diverse mix of sources — including natural gas, oil, coal and nuclear energy — supplying millions of households and workplaces.